Cocoa or Cacao(Theobroma cacao) is an important commodity in the world today and offers a good source of income for small-holder farmers in the Philippines. The country has cultivated cacao since the 17th century. Per the Department of Agriculture statistics, in 1990, the area of cocoa planted was about 18,377 hectares (ha), with most of this growing in Davao, Zamboanga Peninsula, Western Visayas, North Mindanao, ARMM, and Caraga. By 2006, this area had declined to less than 10,000 ha. During the same period, reported production fell from 9,990 tons to about 5,400 tons, with two thirds of the production coming from Davao region alone.

As of 2008, the estimated volume of production is 6,000 to 7,000 tons, with more than 95 percent used in the local market. In fact, the country has to import more than 20,000 tons of cocoa bean equivalent (main as powder and also as butter and liquor) to supply domestic confectionery, baking, beverage, and chocolate manufacturing needs.

Cocoa industry is currently on the upswing due to the growing demand in the global market. The international demand for high quality cocoa beans is growing at about 90,000 tons and Southeast Asian regional grinders need an additional 220,000 tons which they have to import from Africa and other distant areas. The price of cocoa has risen by 100 percent over the last 18 months.

Philippines is being actively promoted as a new source of cocoa supply with the support of NGOs. The potential expansion area for cocoa is huge as it is highly suited to intercropping and mixed farming systems, and can add more than $1,500 per hectare of net income from 500 mature trees per year. In Davao Oriental, there is a substantial area of cacao plantation in its capital town, Mati. Being the biggest coconut producing province in the country, there is still a promising potential for cocoa production through intercropping throughout the province.

The growing demand for cocoa beans and other products coupled with the established standards of fermented cacao, entrepreneurs are guaranteed a good market for said products both, domestic and international.

The industry also presents opportunities for other cocoa-based value-added products such as cocoa tablets for traditional chocolate drink (secuate) and chocolates, among others.